Credit reports are changing, and for the better

On Behalf of | Feb 27, 2023 | Bankruptcy |

Florida residents with poor credit scores are rarely offered attractive interest rates when they obtain credit cards , and they may even find renting an apartment or purchasing auto insurance more difficult. If your credit score is low because you have not borrowed extensively in the past or a medical condition left you in debt, recent changes announced by the three major credit-reporting agencies could improve your situation.

Medical debt

A study conducted in 2022 by the Kaiser Foundation reveals that 41% of Americans have debts related to health care or dental treatment. Unpaid medical bills have traditionally led to lower credit scores, but they no longer have the impact they once did. That is because TransUnion, Experian and Equifax announced have announced that the waiting period before unpaid medical bills appear on credit reports has been increased from six months to a year, and paid medical debt no longer appears at all. The credit reporting agencies have also vowed to remove information about unpaid medical debts of less than $500.

Limited credit

If your borrowing problems are being caused by a lack of credit history, you may be able to build your profile by adding regular monthly payments like rent and utility bills to your credit report. The Experian Boost service allows you to do this without paying a fee, and signing up usually boosts a credit score by 19 points. You will have to give Experian your bank account information if you enrol, but that should not worry you too much as the company already has access to a lot of your personal details. Services like Experian Boost could also be useful if you are trying to rebuild your credit profile after a personal bankruptcy.

Better for lenders and consumers

The credit-reporting system was developed to give banks and credit card companies the information they need to make prudent lending decisions, but it often makes life difficult for people who have not borrowed in the past or find themselves facing unexpected medical bills. The changes announced by the credit-reporting agencies and services like Experian Boost will make things a little easier for these people, and they could also make credit reports more useful to lenders.